Electric plants powering TIC's growth

Local firm lands Front Range project


— The Industrial Co. is experiencing dramatic growth fueled by its success in bidding natural gas power plants.

Based in Steamboat Springs, TIC is among the top 50 general contractors in America. It made its reputation in the late 1970s and 1980s through its willingness to bid and complete unusual construction projects, from geothermal power plants to equipment for coal mines and gold mines.

During 2001 and 2002, TIC is building 11 gas-fired power plants in nine states: Georgia, Illinois, Minnesota, Texas, Mississippi, Arizona, Idaho, Kentucky and Colorado.

Among the plum contracts TIC has landed is the 480-megawatt Front Range Power project, which will employ a pair of high-efficiency combustion turbines from General Electric to generate electricity at a site 17 miles south of Colorado Springs near Fountain. Ground is just being broken on the huge power plant and TIC is committed to delivering it to the client by May 2003. The contract is valued at between $175 and $200 million, TIC's senior manager of business development Paul Compton said.

Compton acknowledged the construction schedule is aggressive and there's a great deal at stake, but he said TIC went after Front Range because of its potential to cement TIC's stature as a company that can deliver a massive project.

"This is a project that we targeted," Compton said. "It is a very aggressive schedule, but unfortunately it always seems to be that way. There is significant risk you stub your toe just once, and a lot can happen."

TIC's growth in recent years has been dramatic. In terms of manhours worked, the company grew by 40 percent in 2000 alone.

"That's a little faster than we want to grow," Compton said. "It's time to pull in the reins a little bit."

Despite the fact that TIC doesn't hesitate to pass on bid opportunities when it doesn't believe a project fits, the company ranked 46th in revenues and 36th in new contract wards in 1999, according to Engineering News Record. TIC's contract awards in 1999 topped $1 billion and revenues were $745 million. TIC ranked fifth in the nation in construction of co-generation power plants, second in steel and nonferrous mining related construction and third in wastewater treatment plant construction.

Power planning

While the lack of power-generation capacity in California is making all the headlines, Compton said power utilities in many states anticipated that demand would increase dramatically and began planning accordingly. Planning ahead is essential, Compton said, because of the lengthy lead time it takes to build a power plant.

In California, for example, it takes two years to go through the regulatory permit process, while in Texas, it takes nine to 12 months, Compton said. The turbines that generate power at the gas-fired plants are back-ordered and the soonest new ones can be delivered is 2004.

Gas-powered plants are the current trend, Compton said, although there is renewed interest in coal.

TIC recently completed a "re-powering" project near Platteville, at the decommissioned Fort St. Vrain nuclear power plant. In the project, a new gas combustion turbine was tied to existing systems at the plant. Fort St. Vrain became a launching pad for TIC's bid to become the contractor for Front Range.

Front Range Power Co. was formed by Coastal Corp. of Delaware (recently purchased by El Paso Energy) and the city of Colorado Springs.

Team approach

Compton said TIC's ability to win the contract was based in part on its ability to team with a Boulder company on the engineering aspects of the project.TIC doesn't provide in-house engineering, so TIC and Utility Engineers are undertaking Front Range together.

"We're in a position where we say, 'Who is the best engineering firm to support the project based on their resources?'" Compton said. "We like a team approach, where everything is shared right down to the bottom line."

That approach is critical because clients are looking for contractors that can demonstrate their viability as a single entity that can do it all in terms of completing massive construction projects like power plants. They insist on that, because lending institutions are requiring it, Compton said. TIC has to demonstrate that it is fiscally strong, and can withstand the challenges of completing big projects on schedule.

"We're lucky to have a strong balance sheet," Compton said. "Cash flow is a big deal in the minds of the banking community."

Much of TIC's ability to pull off such large projects is that to a great extent it relies on "self performance." In other words, it employs most or all of the skilled craftspeople necessary to build the projected. When needed, it can pull key foremen and their teams of a dozen skilled workers off one job to make timely progress on another job.

Hiring young people to grow into becoming skilled crafts people in the construction industry is becoming increasingly difficult, Compton said. But TIC boosts its people power by bringing its employees to Steamboat Springs to give them advanced training.

"Human resources are a scarce commodity," Compton said. "We always take an inordinate time to look at jobs (to make certain) they fit our resources. We've always been a direct hire company."

That implies that more often than not, TIC relies on its own people to do the job, rather than seeking out subcontractors.

TIC will have as many as 300 people at a time working on the Front Range project.

The project

Wade Breisch, TIC's lead electrical estimator, said the easiest way to think of the power plant is to picture a pair of jet engines that burn natural gas to turn a generator to make electricity. It generates additional electricity by capturing the exhaust from the engine and using it to power a single steam turbine.

In terms of physical size, one of the biggest parts of the Front Range project is an air-cooled condenser.

Most power plants rely on water to dissipate heat, Breisch pointed out. But because of a shortage of water in the Colorado Springs area, the new plant will rely on an air-cooling system with the dimensions of a football field, standing 90 feet high.

TIC realized during the '90s that in order to continue to grow as a company it would have to reposition itself to do other work than the work that had become its base. It deliberately went after gas turbine power plants, but never imagined just how wise that decision would prove to be.

"No one predicted the amount of power work that is needed right now," Compton said.

TIC employs 160 people at its headquarters in Steamboat Springs and has had opportunities to shift its corporate base. But Steamboat seems to fit its corporate style.

"There's something different about TIC," Compton said. "It all comes back to what we call our core values. We spent a lot of time putting them into writing."


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